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HomeMy WebLinkAbout8.1 MCE Corporation Economic Evaluation and Comparative Analysisr DUBLIN CALIFORNIA STAFF REPORT CITY COUNCIL Agenda Item 8.1 DATE: October 17, 2023 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SU B.ECT: MCE Corporation Economic Evaluation and Comparative Analysis Prepared by: Jordan Foss, Management Analyst II EXECUTIVE SUMMARY: The City Council will receive a report evaluating the City's costs over a five-year period for maintenance services provided by MCE Corporation. In addition, the report will include a comparative analysis relating to the maintenance services in neighboring jurisdictions of Brentwood, Pleasanton, and San Ramon. STAFF RECOMMENDATION: Receive the report. FINANCIAL IMPACT: None. DESCRIPTION: Background The City of Dublin has contracted with MCE Corporation for 39 years, with the first agreement being executed on June 29, 1984 for annual street maintenance. Since then, services provided by MCE have grown in line with the City's growth and now include maintenance of all City parks and facilities. On July 1, 2017, the City and MCE entered into a five-year agreement for such services, and a subsequent two-year amendment was initiated on July 1, 2022. The current amendment to the agreement is set to expire on June 30, 2024 and the City Manager has the option to extend the term an additional three years. In preparation for the next extension, Staff conducted an assessment of MCE's services, which included an economic evaluation as well as a comparison of services in neighboring cities. Specifically, the evaluation looked at the following: Page 1 of 5 1 • Current MCE responsibilities • Subcontracted services • Historical expenditures • Maintenance requests • Comparison with neighboring jurisdictions This Staff Report presents the MCE review and includes a detailed list of services and subcontractors by task (Attachment 1), and cost comparison with the cities of Pleasanton, San Ramon, and Brentwood (Attachment 2). MCE Evaluation Summary MCE provides maintenance services in the following six general categories: Streets, Parks, Assessment Districts, Buildings, Special Events, and Administration. Within those service categories, MCE utilizes 46 dedicated staff, two of which are administrative positions that assist with overseeing the City's contract, and 44 of which are assigned to the field. In addition, MCE utilizes additional support services or specialized expertise through subcontractors. Currently, MCE utilizes 21 subcontractors, and collects a 13% administrative overhead from the City for management of those contracts. Table 1 shows the City's expenditures for MCE over the last five years. This reflects that the City's largest expenditures are in Parks Maintenance (46% of total), Streets (23%), and Building Maintenance (13%). Attachment 1 provides a detailed list of services and subcontractors by task. Table 1. Actual Expenditures (Figures Rounded) MCE Service Category Streets Building Parks Events Special Districts Administration Contingency Subtotal YoY Change Change FY 2018- 19 $1,232,929 $385,212 $1,588,292 $190,160 $100,815 $150,916 $80,610 $3, 728, 935 FY 2019-20 $1,197,952 $413,549 $1,465,784 $91,415 $76,568 $112,547 $93,225 $3,451,040 -$277,895 -7.5% FY 2020-21 $1,256,307 $346,084 $1,744,098 $80,608 $76,225 $161,502 $343,101 $4, 007, 925 $556,885 16.1% FY 2021- 22 $1,363,651 $539,121 $1,694,229 $271,920 $212,159 $148,495 $6,892 $4,236,466 $228,541 5.7% FY 2022-23 $1,493,092 $602,028 $1,994,953 $321,346 $111,040 $223,575 $95,863 $4,841,897 $605,431 14.3% Page 2 of 5 2 MCE Subcontractors (13% Administrative Overhead included) Streets Building Parks Events $273,106 $316,432 $850,378 $125 $256,659 $221,622 $903,711 $0 $317,554 $241,260 $951,770 $838 $290,651 $516,787 $1,076,662 $14,000 $334,288 $457,209 $1,763,611 $15,450 Special Districts $154,632 $109,919 $141,553 $131,420 $154,999 Admin. Overhead $242,838 $235,319 $246,081 $288,770 $373,271 Contingency $203,277 $237,146 $155,532 $107,287 $145,756 Subtotal $2,040,788 $1,964,376 $2,054,588 $2,425,577 $3,244,584 YoY Change -$110,281 $171,826 $419,234 $780,538 % Change -0.5% 8.7% 20.4% 32.2% MCE and MCE Subcontractors Combined Grand Total $5,769,723 $5,415,416 $6,062,512 $6,662,044 $8,086,481 YoYChange -$354,307 $647,096 $599,532 $1,424,437 % Subcontracted 35% 36% 34% 36% 40% Administrative Charges Only MCE Admin. $150,916 $112,547 $161,502 $148,495 $223,575 Subcontractor $242,838 $235,319 $246,081 $288,770 $373,271 Admin. Overhead Total Admin. $393,755 $347,865 $407,583 $437,265 $596,846 Charges % of Total Exp. 7% 6% 7% 7% 7% On average, 37% of overall MCE expenditures over the last five years were for subcontracted services. Within the Parks and Building Maintenance service categories in particular, subcontractor costs are approaching those of MCE in-house services. In Fiscal Year 2022-23, 47% of all park maintenance and 43% of all building maintenance work was completed by subcontractors. For parks maintenance, subcontractors are used for mowing, weeding, cricket pitch maintenance, and annual field renovations at Fallon Sports Park, Emerald Glen Community Park, and Dublin Sports Grounds. MCE provides direct maintenance of all neighborhood parks and Don Biddle Community Park, which do not have the same mowing requirements of the other parks that are rented for sports activities. For City buildings, subcontractors primarily provide preventative maintenance on specialized assets such as plumbing, HVAC, electrical, roofs, and doors. MCE has doubled their dedicated building staff from two to four full -time -equivalent employees, which correlates to ongoing facility needs and an increase in rental support. Other minor cost increases are associated with an additional MCE administrative staff person, an increase in event support, and an increase in street maintenance activities (including landscaping and street surface maintenance). Page 3 of 5 3 Maintenance Requests SeeClickFix (aka "Fix It Dublin") is an online tool that allows residents and internal customers to report maintenance issues in the City and includes a robust tracking and reporting function. According to available data for the past three fiscal years, maintenance requests have increased 79%, as shown in Table 2. Initial growth in requests in the first two years is attributed to the City implementing SeeClickFix (May 2021) and publicizing the new service, as well as the opening of new parks. The following fiscal year saw modest growth in requests, with internal requests declining marginally. 1 (Total Requests 1 1 Table 2: Maintenance Request Trends FY 2020-21 FY 2021-22 FY 2022-23 1,839 2,911 3,292 YoY % Change 58% 13% External Requests 1,206 1,794 1 2,162 YoY % Change 49% 21% Internal Requests 633 1,145 1,130 YoY % Change 81% -1% Comparative Analysis In addition to the economic review, Staff ran a comparative analysis against the maintenance services provided by the cities of Brentwood, Pleasanton, and San Ramon. The analysis shows that the City's per capita cost ($188 per resident) for maintenance services is nearly half that of the cities of Pleasanton ($359 per resident) and San Ramon ($344 per resident). Brentwood, a city with similar population (66,127) and land area (15 square miles), spends marginally more than Dublin does on maintenance services. Similarly, Dublin spends less per parkland acre ($20,213 per acre) than Pleasanton ($26,977 per acre), San Ramon ($22,592 per acre), and Brentwood ($33,798 per acre) as displayed in Table 3 below. Table 3. Comparative Analysis Summary Dublin I Brentwood I Pleasanton* I San Ramon Population Total Maintenance Budget Cost Per Capita Cost Per Parkland Acre Personnel Costs Contract Costs 67,734 $12,725,484 $188 $20,213 $562,767 $11,175,030 66,127 $17,860,542 $270 $33,798 $4,963,617 $7,220,858 76,689 $27,552,439 $359 $26,977 87,685 $30,171,291 $344 $22,592 $14,090,297 $8,357,297 *Pleasanton was excluded from Personnel and Contract cost comparison due to differences in operating models. While the neighboring jurisdictions offer in-house maintenance services, contract services are still heavily utilized. As an example, San Ramon had a Fiscal Year 2022-23 personnel budget of $14.1 million and a contract services budget of $8.4 million, and Brentwood had a Fiscal Year 2022-23 personnel budget of $5 million and a contract services budget of $7.2 million. These contract Page 4 of 5 4 services include pest control, landscaping/mowing, generator maintenance, HVAC maintenance, fire protection, weed abatement, janitorial services, carpet cleaning, catch basin cleaning, street sweeping, intrusion monitoring, fountain maintenance, and other services as needed to handle services not provided by City personnel. Attachment 2 includes complete details on the comparative analysis. Conclusion MCE provides a one -stop, comprehensive maintenance service solution for the City. The primary driver for the increases in MCE costs over the last five years is the addition of City assets, including one new facility (the Public Safety Complex), four new parks (Sunrise Park, Clover Park, Butterfly Knoll, and Don Biddle Community Park), Fallon Sports Park - Phase 3, and the Imagine Playground at Dublin Sports Grounds. These new community assets have had a direct impact on the increasing demands of MCE's services, and the specialized nature of some assets, like the cricket pitch, have required MCE to expand its use and oversight of subcontractors and have added to the City's total maintenance costs. Moreover, a focus on enhanced maintenance of existing assets and the improved ability for residents to report issues directly have also contributed to increases in the City's costs. These costs will continue to escalate with the opening of the Dublin Cultural Arts Center, Iron Horse Nature Park and Open Space, Wallis Ranch Community Park, and future parks in Eastern Dublin. However, even with these anticipated costs, the City is spending less per acre ($20,213) and per resident ($188) when compared to neighboring jurisdictions with a similar portfolio of maintenance needs. Staff will continue to work with MCE in balancing the City's required maintenance activities with its budgetary limits, in conjunction with the goal of keeping Dublin's variety of parks and facilities in excellent condition. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: The City Council Agenda was posted. ATTACHMENTS: 1) MCE Maintenance Services and Subcontractors by Task List 2) Fiscal Year 2022-23 Comparative Analysis Page 5 of 5 5 Attachment I MCE Maintenance Services Task Task Description Streets Street Maintenance Drainage Maintenance Storm Patrol Sidewalks, Curbs & Gutters Sign Maintenance Striping & Marking Guardrail Repair Spill Cleanup Street Tree Maintenance Street Landscape Maintenance Additional Work Pothole patching, crack filling, asphalt pavement maintenance. Flushing storm drains, catch basin inspection and cleaning, cleaning concrete v-ditches, stream channel clearing. Inspection and cleaning of catch basins, culverts, gutters, ditches, and streams during storms. Temporary ramping of tripping hazards. Installation, removal, repair, and replacement of signage, posts and other sign mounting equipment. Limited re -striping or re -marking of existing striping, limited painting, or re -painting of curbs. Straighten, replace, or repair damaged guardrails and posts. Control and clean-up or assistance with clean-up of material on or near streets. Trimming, pruning, fertilizing, spraying, removal, and replacement of City owned trees. Maintenance of street median landscape including turf, bedding plants, shrubs, irrigations systems, and rodent control. Other work performed at the written request of the City. Parks Park Maintenance Sign Maintenance Storm Patrol Quarterly Assurance Inspections Weed Abatement Spill Cleanup Bike Path Maintenance Additional Work Maintenance of park landscape including turf, bedding, plans, trees, shrubs, irrigation systems, hardscapes, and rodent control. Installation, removal, repair, and replacement of signage, posts and other sign mounting equipment. Inspection and cleaning of catch basins, culverts, gutters, ditches, and streams during storms. Completion of quarterly quality assurance inspections. Removing weeds and vegetation in various areas. Control and clean-up or assistance with clean-up of material on or near streets. All maintenance including cleaning striping and marking surface maintenance, etc. to maintain a bike path that is not adjacent to vehicle lanes. Other work performed at the written request of the City. Building Maintenance Building Maintenance Building Grounds Maintenance of various City -owned buildings and facilities. Maintenance of building landscape including turf, bedding plants, trees, shrubs, irrigation systems, hardscapes, and rodent control. 6 Body Fluid Spills Quality Assurance Additional Work Clean-up of body fluid. Completion of quarterly quality assurance inspections. Other work performed at the written request of the City. Assessment Districts Tree Maintenance Landscape Maintenance Storm Patrol Weed Abatement Sign Maintenance Spill Cleanup Quality Assurance Additional Work Maintenance of Assessment District trees including trimming, pruning, fertilizing, spraying, and removal of trees. Maintenance of Assessment District median and other landscapes areas including turn, bedding plans, shrubs, irrigation systems, and rodent control. Inspection and cleaning of catch basins, culverts, gutters, ditches, and streams during storms. Removing weeds and vegetation in various areas. Installation, removal, repair, and replacement of signage, posts and other sign mounting equipment. Control and clean-up or assistance with clean-up of material on or near streets. Completion of quarterly quality assurance inspections. Other work performed at the written request of the City. Special Events Community Promotions Additional Work Assistance in provision of community events such as parades, holiday events, festivals, etc. Other work performed at the written request of the City. Administration Maintenance Supervision Additional Work Managing maintenance operations. Other work performed at the written request of the City. 7 Subcontractors by Task Drainage Maintenance Roto Rooter Plumbing repairs and clean out. Sign Maintenance The Construction Zone Sign and Safety Equipment Guardrail Repair Calco On call fence and guardrail work. Weed Abatement Del Conte Landscaping RJN Inc. Weed control of bedding areas at all landscapes. Fire abatement discing and mowing. Street Tree Maintenance Del Conte Landscaping West Coast Arborists Weed control of bedding areas at all landscapes. Tree pruning and tree removal. Assessment District Maintenance Del Conte Landscaping Monthly shrub pruning and site work. West Coast Arborists Tree pruning and tree removal. Western Exterminator (Stagecoach Rodent and pest control. only) Street Landscape Maintenance Del Conte Landscaping Western Exterminator Weed control of bedding areas at all landscapes. Rodent and pest control. Park Maintenance 4 Paws Goose Control Control of geese at Dublin Sports Grounds. Calco On -call fence and guardrail work. Del Conte Landscaping (Frank and Grossman (Professional Power washing (RJN Inc. West Coast Arborist Western Exterminator Mowing of large sports parks, weed control of bedding areas at all landscapes, turf fertilization, and monthly shrub pruning. Fallon Sports Park cricket pitch maintenance. Power washing services. Fire abatement discing and mowing. Tree pruning and tree removal. Rodent and pest control. Building Maintenance Bay Air Mechanical Baywide Glass Calco Comfort Dynamics East Bay Pools Frontier Pacific Doors Gamble Construction Preventive maintenance and repair of HVAC systems. Glass repairs. Fence and guardrail work. Maintenance of Reliable Control Systems, HVAC. Fountain and splash pad maintenance. Door repairs. General building repairs. 8 IRoto-Rooter Plumbing repairs and clean out. (Savior Plumbing Plumbing repairs. (Sierra Roofing Roof repairs. ISilverado Valley Electric Electrical repairs. (Vortex Doors Overhead door and general door repairs. IWindology Window Treatments Window treatment repairs. 9 Attachment 2 Fiscal Year 2022-23 Comparative Analysis Dublin Pleasanton' San Ramon Brentwood City Characteristics Land Area (square miles) Street Miles2 Population 15 148 67,734 25 213 76,689 18 241 87,685 15 192 66,127 Total Maintenance Costs Number of Maintenance Staff Total Maintenance Budget' Personnel Contract Services Other (Equipment/Materials/internal Transfers/Other services) 47 $12,725,484 $562,767 $11,175,030 $987,687 120 $27,552,439 81 $30,171,291 $14,090,872 $8,357,297 $7,723,122 43 $17,860,542 $4,963,617 $7,220,858 $5,676,0674 Maintenance Services Cost per Capita Total Maintenance Budget $12,725,484 $27,552,439 $30,171,291 $17,860,542 Cost Per Capita $188 $359 $344 $270 Park Maintenance Cost Per Acre Parkland Acreage (Total) 267 451 375 243 Parkland Maintenance $5,396,890 $12,166,775 $8,471,952 $8,212,880 Expenditures Cost per Parkland Acre $20,213 $26,977 $22,592 $33,798 Park Maintenance Metrics Number of Parks 28 46 58 68 Number of Community Parks5 7 Number of Neighborhood Parks6 21 Number of Aquatic Centers 1 9 37 1 6 52 2 9 57 1 1 Pleasanton was excluded from Total Maintenance Cost comparison due to differences in operating models. 2 Center line miles. 3 Data provided from City budget documents or directly from City Staff. 4 Does not include Internal Service Costs/Fund Transfers for Landscape and Lighting District services. Defined as multi -activity parks designed for community -wide use. 6 Defined as parks that serve the population of the immediate neighborhood. 10 MCE Economic Evaluation and Comparative Analysis October 17,2023 !�t DUBLIN CALIFORNIA 11 Background • June 1984 —Initial Contract with MCE — Street Maintenance Only • July 1,2017 —Most Recent Agreement — Comprehensive Maintenance Services • July I , 2022 — CurrentTwo-YearAmendment — Expiring on June 30, 2024 — City Manager Option to Extend for Three More Years MCE Evaluation • MCE provides maintenance services in six general service categories: - Administration - Parks - Assessment Districts - Special Events - Buildings - Streets • 46 dedicated staff — 44 Field Staff — 2 Administrative Staff • 21 subcontractors within service categories • 13% administrative fee for subcontract work MCE Evaluation, 2 • The City's largest expenditures are in the following three categories: Parks Maintenance (46% of total expenditures) Streets (23% of total expenditures) Building Maintenance (13% of total expenditures) • Fiscal Years 2018-19 through 2022-23 — 37% of the total expenditures for subcontracted services • Subcontractor expenditures are the highest in Parks (47%) and Building Maintenance (43%) 14 Maintenance Requests • SeeClickFix (aka"Fix It Dublin") Maintenance Request Tool • Maintenance requests increased 79% from FY20-21 to FY22-23 Total Requests 1,839 2,939 3,292 External Requests (Initiated via public portal) 1,206 1,794 2,162 Internal Requests 633 1,145 1,130 (Initiated via staff portal) 15 Comparative Analysis • Pleasanton, San Ramon, and Brentwood • City Expenditures per resident ($188); per parkland acre ($20,2 13) — Both less than neighboring cities • Other jurisdictions utilize in-house maintenance services and also utilize contract services.These contract services include: — Generator and HVAC maintenance — Pest control — Intrusion and fire monitoring — Weed abatement Janitorial and carpet cleaning services — Street sweeping — Landscaping services (including mowing) Conclusion • Primary driver for increases over last five years: — Four new City parks — One Sports Park expansion — One new Park facility • Additional assets will increase future maintenance costs • City will continue to spend less per resident and per acre than neighboring jurisdictions Questions?